Blackbaud earnings rose in the third quarter of 2026, with revenue up 4.1% to $292.6 million and non-GAAP diluted earnings per share increasing to $1.36. The software provider reaffirmed its full-year guidance and said it expects to finish at the upper end of some ranges or better.
Key Takeaways
- Third-quarter non-GAAP free cash flow was $126 million, up $2.8 million from a year earlier.
- Blackbaud expects revenue and adjusted EBITDA in the upper half of its 2026 guidance ranges.
- A larger renewal cohort is moderating recurring revenue growth, with retention expected to return to historical levels by the end of 2027.
Blackbaud earnings and cash flow
For the quarter ended September 30, Blackbaud reported GAAP net income of $46.1 million, or $1.02 per diluted share. Its third-quarter financial results also showed non-GAAP adjusted EBITDA of $111.1 million, with a 38.0% margin.
Non-GAAP diluted earnings per share rose by $0.26 from the third quarter of 2025. GAAP operating cash flow was $141.7 million, while non-GAAP free cash flow reached $126.0 million. The company provides software for nonprofits, educational institutions and other organizations.
| Item | Details |
|---|---|
| 2026 GAAP revenue guidance | $1.173 billion–$1.179 billion |
| 2026 non-GAAP adjusted EBITDA guidance | $430 million–$438 million |
| 2026 non-GAAP diluted EPS guidance | $5.15–$5.25 |
| 2026 non-GAAP free cash flow guidance | $280 million–$290 million |
Full-year guidance and renewal pressure
Blackbaud reaffirmed its 2026 guidance ranges. On the earnings call, management said it expected revenue and non-GAAP adjusted EBITDA in the upper half of their ranges, and non-GAAP earnings per share and free cash flow at or above the high end.
The company increased its estimate for full-year global workforce transition costs to $8 million–$10 million from $6 million–$8 million. CFO Chad Anderson said transition activity would continue through 2027, with the cash impact of a voluntary separation program falling primarily in the fourth quarter.
Anderson said the 2026 renewal cohort was approximately 40% larger than the previous year’s, moderating contractual recurring revenue growth. He expects that growth to normalize in the second half of 2027 and gross dollar retention to return to its historical 91%–92% range by year-end 2027.
AI products and share repurchases
Blackbaud introduced Platform for Good and Lantern, a fundraising-focused language model developed with Databricks. The company said Lantern will begin powering selected Raiser’s Edge NXT and Agents for Good capabilities in 2027; it does not expect meaningful revenue from new AI products in 2026.
Blackbaud repurchased more than 7% of its common shares outstanding at the end of 2025 during the first nine months of 2026. It expects total 2026 repurchases to represent 7%–10% of that year-end 2025 share count.
Next milestone
Blackbaud plans to close its two remaining company-operated co-location data centers by the end of 2026, with efficiency benefits beginning in 2027.
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